Doing Business In China Case Study

When U.S business are thinking about going abroad, they need to be aware of the other country’s laws and regulations. “All businesses must, of course, follow the laws of the countries in which they are physically present and operating. Businesses may also be required, even in their foreign operations, to continue to follow certain laws of their home country. Also, businesses operating across national borders will also be subject to international law (Tony McAdams, 2014)”.

Governments might change or new political parties might be elected, but the concern of the multinational corporation is the continuity of the set of rules or codes of behavior and the continuation of the rule of law—regardless of which government is in power.

Many companies today want to expand their business to the international business, which can bring cost down and profits up. Taking a business internationally means knowing the rules and regulations of the countries you are entering. There can be many issues with going global which include cultural barriers, diversity issues, multicultural issues, political issues, and economical issues. It is very important to know how important expansion is to the company and what implications will come from going global.

In an effort to develop a better understanding of the lessons learned for a recent trade delegation visit to the People’s Republic of China(PRC), this briefing note will build on the salient points of the ethical and cultural considerations required before undertaking business ventures in the PRC. First, through a closer look at some aspects of the origins of the Chinese cultural and ethical business context one may develop an appropriate frame of reference for the present discussion. Then, with a brief examination of the issues of corruption, extralegal affairs, and piracy, it is possible to appreciate the most pressing of ethical considerations for foreign businesses in, and competing with, China.

International trade has boomed over the past three decades. Since 1990, the number of multinational corporations in the world has grown from 30,000 to more than 63,000 (Kotler, P. & Armstrong, G. p.552). According to different experts becoming a global company is a big feat, but it is important to improve the overall growth potential of a company. To convert a successfully business from domestic to international, a company will need to consider a set of factors that might not affect a local company. For example, factors as ethics & culture. These factors must be considered carefully by Jamb Juice.

The rapid development of economy promotes the development of multinational companies, which have become a general form rather than a special form of a company. Multinational companies carry a lot of money, production technology, management expertise and sales channels to expand their business around the world. There is no doubt that multinational companies will become the subject of an act of international relations and play an increasingly large impact on international relations.

In retrospect, Chinese companies invested small portion in R&D, typically 2% of sales by far away from Indian companies’ 7.7% (Grace, 2004). Overall, Indian firms are supported by R&D programs and have well positioned themselves in the domestic market so that more intense competition will be confronted in Indian pharmaceuticals industry. Another weakness when exporting to India is that India is among the lowest in the world in terms of per capita consumption of pharmaceuticals, with $4.50 compared to $13 in China (Greene, 2007). Under those conditions, more promising pharmaceuticals market can be expected in China than in India. Furthermore, with the rising number of affluent Chinese, diseases such as diabetes, cardiovascular diseases and cancer all shows the growing trend, offering a huge market demand for drug development (kermani, 2008). The huge market demands as well as less competition make China an attractive market for pharmaceuticals industry.

With the increasing global economy, it is no surprise that Chinese and American businesses are working together more closely. Despite the anti-Chinese rhetoric that is common in politics, the fact remains that the globalization of business will see the Chinese and Americans crossing paths and working together. Due to the hyperbole involved in politics, myths are common involving Chinese business practices. A closer analysis will likely dispel the common myths involving business practices in China.

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

POLICY DECISION AND OBJECTIVE: On 21 June 2017, Secretary Tillerson and Secretary Mattis issued a joint statement opposing current changes to the status quo, excessive maritime claims and peaceful resolutions of disputes. In support of the objectives communicated by the Secretary of State and Defense, the current China policy of reaffirming U.S. commitments to the allies, focusing on the South China Sea region ally of the Philippines, will signal the U.S. support to other nations in the region. Given the current overtures of China to the Philippine via economic and military aid, the U.S. must increase assistance to the Philippine government to provide the reaffirming commitment and maintain the status quo.

The role of government when doing business in China is very important. It is especially important if you are from a different country, such as the United States, because the approaches to dealing with the government are much different. There are many factors in which should be considered when dealing with business related issues with the government. These include whether or not your business strategies go along with the plan the government has for Chinas development, understanding how the Chinese government interfaces with your business, and also how to deal with pressures from the government when they want you to do things you and your business don’t want to do.

In the summer of 2015, China introduced the Asian Infrastructure Investment Bank to increase their reach across the Asian region (Creamer, 2017). Currently, there are around 60 countries that are supporting this bank (Creamer, 2017). Despite lobbying by the United States of America against the Asian Infrastructure Investment Bank, there are several United States allies, including Britain, that are supporting the bank; the United States chose to lobby against the Asian Infrastructure Investment Bank because of the fear that the bank could rival the World Bank, thus increasing China’s power relative to the world (Shepard, 2017). By analyzing China’s role in the Asian Infrastructure Investment Bank through an offensive realism point of view,

Always arrive exactly on time for a banquet. Never arrive early for dinner. This implies that you are hungry and that you are here only for the food.

Due to the country's large population and economic growth, China is the 2nd largest contributor of GHGs in the world. However, the government originally perceived climate change as a scientific issue rather than an issue that could be handled through policy (Zhou, 2008). The country began its efforts to combat climate change after feeling pressure from other nations to reduce its emissions. As such, China established the National Coordination Committee on Climate Change (NCCCC) to help achieve its targets of 20% reduction of energy intensity and 10% reduction of the emissions of major pollutants (Zhou, 2008). The Committee develops policies, governs negotiations and makes decisions related to emissions and

Political & Legal environment: The political system of a country is an important part of a companies marco-environment. ‘Who governs the country?’ ‘What does the government follow?’ and ‘What legal regulations follow from these policies?’. The most important factors a company is subject to are policy uncertainty, macro instability, and tax rates. Considering China is a country in transition all of the above factors are subject to change, to a degree substantially larger than it is in stable developed countries. We have recently seen changes happening in China on all of the above factors. One example is the new regulations regarding copying, which turned out in favor of Starbucks. However, what will happen in the (near) future is hard to tell. Whatever happens though, Starbucks will be subject to the consequences, whether positive or negative.